Experts have tough time explaining higher gas prices

December 14, 2008|By SARAH RICE WSBT-TV Report

SOUTH BEND — Gas prices are going down just about everywhere else but here. The recent jump at the pump is frustrating drivers. So what's behind the higher prices? It's a question many are having a difficult time explaining. For Barbara Cauffman, talking to drivers at the One Stop Sandwich Shop isn't always this easy. "The biggest thing they say is, what happened," said Cauffman. As the national average for a gallon of gas continues to drop, prices in our area are going up. According to AAA, South Bend drivers are paying around $1.74 a gallon. That's almost a 25 cent jump in a week, leaving workers like Cauffman shrugging their shoulders. "And I just respond and say I don't know," said Cauffman. Cauffman isn't alone. Local experts and distributors are also scratching their heads. "So, Thursday the gas price went up. And they called and I said 'wow, what happened' and he goes 'I don't know.' He's just told to do it like everybody else," said Cauffman. Some experts think a disruption in the supply may have caused the increase. They say several years ago refineries were running at about 70 percent capacity. Now they're running close to 100 percent. So even just the slightest disruption will send gas prices up. But drivers have their own theories. "I figured maybe the oil prices went up," said Dolores Derbin. "Probably supply and demand here because everything is, like, really high in this town," said Curtis Meade. "I think we have good gas marketers here. And I think they know how to play the market really well," said Karolyn Kuntz. But, no matter the reason, there's no hiding the frustration, especially right now. "People are trying to put food on their table and have a decent good Christmas. The job layoffs are massive and we still have elevated gas prices that are kind of falsely elevated at this point," said Kuntz. Times are tough, but many drivers can't complain. Just think, we could be paying $4 a gallon like we did this summer. "I never thought they'd go that high nor did I think it would come back to $1.58, so there's little blessing everywhere," said Derbin. OPEC officials are scheduled to meet later this week, and experts say there's no doubt they'll decide to cut oil supplies. The big question will be how much. The answer could end up sending gas prices even higher.